The UK’s approach to funding the UN humanitarian system

Review

This review found that DFID has a strong strategy for using its funding and influence to strengthen UN humanitarian agencies and global humanitarian practice, but its record to date in promoting practical reforms is mixed. We made five recommendations.

Findings

• DFID has actively promoted improvements in humanitarian practice, with clear and well-considered objectives and has used core funding to support other efforts to strengthen UN humanitarian agencies, but there are gaps in DFID’s approach to reform, particularly around the UN’s normative role and its management of delivery partners.
• DFID’s move to a joint business case and payment by results for UN agencies represents an ambitious shift in focus from agency to system-wide performance.
• DFID has used its core funding strategically to support its objectives for reform in the UN humanitarian system. For example DFID has introduced a stronger focus on value for money and risk management into the UN humanitarian system
• DFID has made good progress on increasing the use of cash transfers as a form of humanitarian relief but progress on DFID’s other thematic reform objectives has been more mixed. DFID has taken up the cause of preventing sexual exploitation and abuse in humanitarian assistance, but is still identifying practical solutions.
• DFID is yet to come up with a convincing way of building performance incentives into its core funding of UN agencies. The design of the payment by results mechanism needs work if it is to succeed in creating positive incentives for reform.
• DFID does not yet have a mechanism to independently verify UN performance against payment by results indicators based on Grand Bargain and World Humanitarian Summit commitments.
• DFID’s reporting and diligence requirements have become increasingly burdensome.

Recommendations

1. In the next annual review of its joint business case for core funding for UN humanitarian agencies, DFID should assess the practical implications of payment by results for agency budgets, planning and operations (particularly for CERF) and whether the resulting incentives are in fact accelerating implementation of the Grand Bargain.
2. DFID should step up its engagement with the international working groups that are translating the Grand Bargain principles into practical measures for improving humanitarian action, and develop guidance for country offices on how to prioritise and pursue these measures at country level.
3. DFID should develop a plan for simplifying its reporting requirements for UN humanitarian agencies, in accordance with its Grand Bargain commitment. This should take account of the trade-offs between increased oversight and transaction costs, with a focus on proportionate solutions.
4. DFID’s engagement with UN humanitarian agencies on effectiveness and value for money should address how they subcontract non-government organisations (NGOs) and the management overheads involved in doing so, as well as promoting compliance with safeguarding requirements through their delivery chains.
5. DFID should review how it supports the normative functions of UN humanitarian agencies, particularly at country level, and ensure that staff resources and budgets are available to support UN-led initiatives to improve the quality of humanitarian response.